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PUC opens investigation of PSNH's electric rates

CONCORD - The state Public Utilities Commission is opening an investigation to determine if Public Service of New Hampshire can provide safe and reliable electric rates to its customers.

The order issued Friday says market conditions have changed significantly since the 2003 law passed allowing Public Service to retain it generating plants and customers may be paying higher rates because of the generating facilities.

The order states: "This is an inquiry to be conducted by Commission Staff to explore the market conditions facing PSNH in the near term, PSNH's proposals to maintain default service at just and reasonable rates in light of those market conditions, and the impact, if any, of continued ownership and operation on the competitive electric market." The commission notes with the abundance of natural gas, the cost of electricity has been reduced substantially below the company's generating costs.

When the company does buy electricity at lower prices on the competitive market, the PUC notes, customers still have to pay the cost of maintaining the generating facilities.

"We share the PUC's interest in ensuring the costs associated with vital services are fair and as low as possible," Public Services spokesman Martin Murray said Friday. "We're very interested in working with regulators and the legislature on measures to provide rate flexibility in recovering costs associated with state environmental initiatives."

He said the company's most recent filing for default service included a 1.5 cent a kilowatt hour charge for environmental initiatives mandated by the state.

Murray said there is an admitted disparity in costs today between those who can purchase energy on the open market and those customers who are on default service.

The PUC notes in its order, as prices rise more and more customers leave Public Service and purchase their electricity from other providers, which results in fewer and fewer customers paying the base costs of the utility's generating facilities.

Large commercial customers for years have been steadily moving to other providers for their electricity, although they continue to be customers of Public Services distribution system.

The migration of large users away from the utility caused the company several years ago to ask regulators to approve a surcharge on its distribution customers to help address the costs of its generating facilities, but regulators balked at the proposal.

Murray noted that for years, the company's generating facilities served the state very well, saving customers millions of dollar.